Radio Frequency Identification Helps Recognize the "Real Thing"

by Darla Dernovsek

When it comes to devices that rely on radio frequency identification (RFID), you could say that change is in the air.

RFID is the term describing a variety of wireless devices that send and receive a radio signal. When these signals are sent from an RFID device to a receiver known as a "reader," RFID makes it possible to share information for many purposes.

A 2007 survey by IDTechEx, a company that provides research and analysis about RFID electronics, Cambridge, Mass., showed that 3.75 billion RFID tags had been sold. That means the odds are good that many people reading this article already have benefited from RFID technology.

For example, if you use an I-Pass or FasTrak device to pay highway tolls electronically, instead of stopping to toss change into a bin, RFID helps speed you on your way.

Understanding RFID

An RFID device consists of a microchip and an antenna coil, which allows the device to be embedded in many different items. Tests have successfully placed RFID inside small "fobs" that attach to key rings, the plastic heads of automobile keys, plastic cards used for credit or debit card accounts, and other items.

The RFID device doesn't require a power source, which increases its flexibility. Instead, the power source for the information exchange is provided by the RFID reader, which sends out and receives the radio signals that carry information.

Shipping companies use a basic version of RFID technology called electronic product code (EPC) to track shipments of goods. A handful of retailers are using EPC to monitor inventory and to help find items that shoppers are seeking on their shelves.

In this application, the RFID reader sends out an interrogation signal that is the electronic equivalent of asking, "Can you hear me?" Each EPC device emits a unique identifier, which allows it to respond to the signal so the reader can track its location. In essence, the RFID tag replies, "Here I am."

Making payments

RFID devices also can be equipped to exchange more sophisticated information. Likewise, the range of the radio signal sent by an RFID device can vary with the intended use. That makes it possible to limit the RFID range to a small area, which becomes an important security element when using RFID to make payments.

Payments made by cards or other devices that can respond to signals from RFID readers are known as "contactless" payments, according to Bill McCracken, CEO of Synergistics Research Corporation, Atlanta. Synergistics has studied contactless payments' appeal to consumers in several studies.

McCracken says using contactless payments is attractive to many consumers for two reasons.

• Privacy--Contactless payments increase the cardholder's privacy because the RFID device and readers exchange codes that enable payment in place of personal information such as the accountholder's name. In a Synergistics survey, 70% of consumers called this the most attractive aspect of contactless payments.

• Speed--Ranking second in the survey was a desire for greater speed for small transactions such as buying a cup of coffee or paying for mass transit.

A need for speed

McCracken notes that with contactless payments, consumers don't have to swipe their card, enter a PIN (personal identification number), or sign a receipt. Instead, they simply swish their card within roughly six to 12 inches of a reader and go on their way. That's much quicker than counting out change.

"Speed is something that younger consumers really find very appealing," McCracken says. "If they can save a few seconds with some of the many transactions they complete each day, there's a big plus to that."

He adds that young consumers in the age group of 18 to 34, often described as Generation Y, also have a desire to own the latest technology.

While RFID is relatively new, its use is growing, with one Synergistics study showing that 8% to 9% of Internet users in all age groups pay for some items with contactless options offered by credit card companies such as Visa. McCracken believes that Internet users are more likely to have RFID.

Although contactless payments are appealing, McCracken notes that it could take many years before most merchants have the equipment required to accept payments sent by RFID signals. Many merchants still are waiting to see how quickly consumers will adopt contactless cards before spending the money to install contactless readers. While merchant acceptance is growing slowly, McCracken says, "I think we will get there."

Security concerns

The possibility that electronic eavesdroppers might steal contactless payment information was cited as a concern by 74% of consumers responding to the Synergistics survey.

While early tests showed that RFID signals could be cracked, refinements since have greatly improved the security of contactless payments and other forms of RFID used to share sensitive information. Yet security continues to worry some consumers, in part because RFID technology has the potential for unusual applications.

At least two projects have tested the concept of implanting tiny RFID devices in humans. A Cincinnati security firm implanted devices in the arms of two employees to restrict access to secure areas, while an exclusive nightclub in Spain implanted the devices in the arms of customers who wanted the privilege of paying for purchases without pulling out their wallets.

These highly publicized tests were criticized by privacy advocates and led to the passage of a Wisconsin law (2005 Wisconsin Act 482—Human Microchip Implantation) that forbids embedding tracking devices in humans without their knowledge.

Yet even that law acknowledges that there may be times when carrying an RFID device can be beneficial. RFID's possibilities expand when the technology is paired with computer chips that use radio frequency signals to exchange more sophisticated information. For example, medical researchers are examining options for using wireless devices equipped with technology similar to RFID to monitor heart performance and other biological functions.

Exploring the benefits

Some experts say the biggest benefits of RFID are likely to continue to occur behind the scenes, where most consumers are unaware of them.

For example, some pharmaceutical companies are placing RFID tags on shipments--and sometimes even on individual medicine capsules--to separate genuine medications from counterfeit drugs. Although the consumer never sees it, that application can help guard consumers from ineffective or even harmful fakes.

Identifying the "real thing" with a radio signal illustrates the high appeal of RFID for developers looking for ways to use technology to enhance the routine of daily living.

Published August 13, 2007

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